Dale Gillham of financial services company, Wealth Within, wears many hats - the investor, fund manager, educator, entrepreneur and the author will talk about his philosophy on property investing, his setbacks and successes and how your state of mind can impact your situation.
Also find out from Gilham how to set and forget to keep the emotion out of property, how he set out to achieve his goal of becoming a millionaire through continually learning more and what he has gleaned from property expert Michael Yardney via his mentorship.
So… What does a typical day look like for Gilham?
I just went to the chiropractor this morning, went to my therapist after that. I've been out for coffee. I think I've answered two emails and it's now nearly 1 pm. So I haven't done much today. Some days I'll get up and go to the gym and I'm thinking, ‘I should do some research on the marketplace.’ This morning I actually got up at 5 am and I was in my recording booth recording my stock analysis for clients.
Usually I’ll sit down with my senior analyst, have a look at the market and have a bit of a chat about that. I might write some articles. I've written a couple of articles this week. The business generally runs itself and I oversee it. I talk to clients, I talk to mentor traders at times, I answer questions on the phone or via email from our clients. It's quite a varied sort of role that I have. I don't have a typical day at all.
Dale has his own philosophy towards property investments. He describes himself as a ‘passive property investor’ and admits that he is dispassionate about it - so how has this worked for him?
The property was never a huge focus of mine. It was always part of my plan in terms of that. I've done property development now and I'm getting this property but never been a big focus of mine. It's more being offered to me. Property is something that you do a lot of work in your research to get it and then once you get it you forget about it pretty much you know that the property managers run it and if it's making money, it's making money.
Property damage is more of a passive investment if that makes sense. We did development in Queensland and I put a joint venture together and ran that with some with my partners. The real estate agent rings me up and they said, ‘Oh we haven't seen your property, when do you want to visit?’ I said, ‘I've never even seen one brick of that property.’ To me, I just saw an empty block. It had termites in it, I love that, came back and put it together and we've had tenants in it for over 10 years and I've not even seen the front other than in a photo.
Well, that is definitely very, very passive by the sound of it.
Once you start making money I don't need to see it, it's being looked after properly. And then I ask them to show me photos when they did their inspection and detail photos and that sort of stuff. But outside of it's just a money-making thing. I'm never going to live in it. It's an investment vehicle for me, if it doesn't make money then I get rid of it. Yeah. It's a dispassionate way about it.
Gilham describes his philosophy towards property investing and offers some handy investment tips for property investors.
Often I find property investors are just into the property, you will see share investors just investing in shares. To me, that's not us. You need to diversify your portfolio because each market has its day in the sunshine and each market has its day in the rain as well. You need to look at different avenues for investing. It’s quite exciting.
In the US I'm using the DOW. In the UK using shares from the FTSE but it's about creating cash flow and creating capital growth out of your portfolio, which is how I turn that into property investment as well.
Raised in Victoria, Gilham lists his mother as his biggest inspiration. He talks about his humble beginnings and how this influenced his attitude and mentality as a property investor.
I was born in Geelong. Born in Geelong, obviously in Melbourne. I think I lived there till I was 34.
I ended up working in a bank. I grew up in a single-parent family. My dad died when I was three months old. We grew up on no money, I had second-hand everything - you name it. Second-hand toys... Mum would buy stuff that was missing bits and pieces from an Op-Shop. My mum was a very big inspiration to me. She taught me that it's not what happens to you, it's how you handle it. So I had some great teaching by her. She said that ‘Being broke is a temporary situation, but if you've got a poor state of mind then nobody can help you, because it's an attitude.’
I find sometimes people have a poor mentality when looking at investing in property. I know we talk a little bit about psychology and destiny. But to me, people are their own worst enemies quite regularly.
After a brief stint at university, his interest in media changed when he realised that it wasn’t going to make him money. He wanted to be a millionaire. That’s when he began looking into investing.
When I was 19 I started off at uni and I didn't really like it, I thought, ‘I'm not going to learn how to make a lot of money.’ I left after about three or four months and went and got a job with a bank in a little country town just outside of Geelong. It's called Bannock Vernon. If you ever had any Bannock Vernon wines you’ll love them. I stayed with the bank for about eight years. I travelled around the country in Victoria getting multiple roles but I ended up being at the head office in Melbourne. I was across the road from a stock exchange, with the open outcry system in the mid-1980s. You could see the chalkboards, the chalky and everything else. We had brokers coming in giving us money and people giving us share certificates and buying/selling shares.
I was actually really interested in media so I actually started getting a Bachelor of Arts and I was into photography and video media. Now back in those days you had reel machines, film cameras and no such thing as all this automated stuff. We didn't have enough people to have a PC at school. How do you live life without a mobile phone now?
I knew that I wanted to be successful. I always knew that I was going to be a millionaire. So I was always very focussed on that and was always one of those people would just ask more questions. I was always going ‘Why?’ and I wanted to understand things. To me, whilst I was interested in media I realised I wasn't going to make a lot of money out of that and I wasn't going to achieve my goals.
Gilham’s experience with millionaire schemes and the role of mentors and books, all directed him down the path of property investing.
I just signed up for Amway when I was 18 or 19. This company sold the dream of ‘becoming a millionaire by the age of 25’ and I thought this sounded like me. It was a multi-level marketing company that's perfectly legal nothing wrong with that. But it did introduce me to a lot of great teachers, mentors and some of those awesome books, How To Make Money Made Simple. Really great books. Things like The Richest Man in Babylon, awesome book.
If you've got somebody who is where you want to be or knows what you need to know, ask questions that sort of stuff. And it's and that's how I live my life. It's just finding people, for example like Margaret Lomas and Michael Yardney. When I met Michael I had investment properties. I was in two mastermind groups with Michael and he's a property guy in Michigan. That's where we had great conversations. I went and contracted to Michael for a year, just one or two days a week to learn property investing and property development.
It was worthwhile for him because he got some of my expertise and I helped him put together his first workshops, for example, how to present them and everything else. He gave me the content and I put it together. That's the sort of stuff I did because I thought ‘well I want to learn this. So who's great at what they do?’ You know people like Michael and Margaret are great at what they do.
Gilham took on a new direction in his career when he made the first step to launch himself into the market, making a courageous move to get the attention of his future boss.
When I was in Geelong I was running my own business and I got married and just before I got married, my wife wanted a house. [00:19:14] We just bought a house which was like 90k, that's really cheap for today's prices. [00:19:31] I realised pretty quickly that Geelong wasn't going to allow me to be the person I needed to be. It's a great place to live and bring up a family but if you want to be successful you actually have to pretty much leave because it's still that sort of industrial type of town. It's like there's a lot of tall poppy syndrome going on there and so I needed to leave.
I was meeting with my mentor. I was talking to him I said I need to get out of this. He was running the training sessions in Melbourne over 12-13 weeks. I said, ‘Right, I'm going to enrol in this.’ So I was driving up to Melbourne at 5pm in the afternoon and coming back at anywhere between 1 to 2 am and going back to work the next day. My goal was to transition into something different and have a new career path. Whilst I was there, he said to me ‘You need to meet these two guys’. They were working for a national company that was teaching people about making money in terms of property, shares, bonds, bank bills investment structures. I went to one of their seminars. I thought I needed to work for them to gain that knowledge. So I just faxed my resume to the boss in QLD, and he said he was fine to meet with me.
What's it called. I'm on the job. And he said you don't need to I don't have a job for you in Ireland. I said that's OK. You'll see plenty when you do have one coming to see you.
That's your confidence.
To me it's about finding out what you want and then go and chase that. I was prepared to fly to Brisbane to meet the boss and I said, ‘I'm going to save you time and money. You will have another job in Melbourne at some stage and it's mine. I don't have a job right now, I just want to work for you.’ To me, it's about attitude. It's making sure you go into whatever you do with the right attitude and not go with your cap in hand expecting things. It's about proving yourself and too many people nowadays have this entitlement type of attitude.
His worst investing moment came when he found himself with no money to his name and no car; he explains how he dealt with that situation and landed himself a new role.
I had a business small business in Geelong retail business in Geelong and I'm not sure whether you remember that pyramid classic channel?
Yeah, you mentioned it.
Everybody in Geelong either works at Pyramid, works for a company that works for a Pyramid or had a friend or relative working for Pyramid Building Society. They owned a lot of different stuff. My ex-wife used to work here. She worked for the general manager of one of their subsidiaries. My best mate worked for the solicitors that did all their work and the list goes on. They got shut down because business accounts got frozen. So I ended up having this business with nobody walking in the door and pretty much no money.
I just shut shop. I just picked up the phone and I actually rang the local radio station because I thought that sounded interesting. I did have media in my blood from being at school and I thought that sounds interesting. I reckon I can do this. I rang and spoke to the boss there and said. ‘I need a job.’
So I went and had lunch with him the next week and two hours later walked out with a job. But that's what I do, find where you want to work and go in. It's not an arrogant thing.
I had no money. I had to sell the vehicle that I had with the business. I had no car, no money. My wife almost left me, I just bought a new house. I bought a house for us. And here I'm trying to do a job. I need a car and I was borrowing cars for six months and it's about doing what you need to do to get to where you want to go.
His a-ha moment was when he realised he wanted to do property development.
It really was my time with Michael in the Mastermind groups. He was talking about property developments and what he was doing and it was a time when he launched his company Metropole. We had lots of good chats. Then when I gave up working for somebody else and just started trading he asked me to come and work for him, he said two half days a week. But it turned into two full days. He was wanting more and I said, ‘No, I'm a trader, that's what I do.’
So whilst I like property - I'm really supportive of people and strongly recommend that people have property portfolios - I just resonate more with shares. Working with Michael and travelling around with him, it's just an amazing little journey in terms of understanding the value of doing property development, people buy existing bricks and mortar that they can see, touch, feel, smell. To me, being a share trader, it's just a block of land. It’s just numbered on a piece of paper to me.
Now Gilham is excited about sharing his knowledge with others, believing in giving back to the community and helping out young people who are equally as passionate about investing.
I don't know any successful person that won't spend time with somebody who has the right attitude and wants to learn to do it properly.
As an expert, you do get a lot of people that have that poor mentality and try and waste your time. You always know when there's somebody who has the lights on and they're passionate. I don't know an expert that's not willing to share stuff with people and I haven't had that issue. Every time I wanted to understand something I'd just find an expert and start talking to them and Bob's your uncle, basically they start helping you understand what you've got to do. Most people are like that and successful people love giving back. I really do and I'd love to see young people who are passionate. I mean only two weeks ago, someone studying Business/ Finance at University sent me his resumé wanting work experience. He said, ‘I'll do anything. I just I'm passionate about it.’ Most uni students if they want to do work experience they will do a couple of weeks in their three-month break. He just wants to do work experience the whole three months. That shows a good attitude and naturally, I get excited about that. We're looking for young guys like this and young girls who are just excited about where they're going and have an idea. That's what I'd like to achieve and because that's what I was like.
Dale Gillham Shares His Tips For Getting Into The Market
So, what was holding Gilham back when starting his property investing journey?
Cash flow, because cash flow is king. If you don't have cash, you’ve got nothing. The property requires cash to get into it.
I mean it's all relative. When I first bought my first house with my first wife. I'd been saving up and was in managed funds. I used the managed fund cash for the house deposit. 20 per cent back in those days is still relative to today.
In monetary terms and what you get paid, my first pay cheque was low. For what I get paid in two hours used to be for the whole week back then. It's really relative and it's about being able to afford it and getting the cash flow.
I often get a lot of young people saying ‘ I can't get into properties’. As soon as somebody starts work they should be putting in a 20 to 30 per cent of their income into their investments. Property is a fantastic investment for everybody. If you don't have a couple of hundred thousand dollars nowadays what do you do? So you could wind up somewhere else.
Gilham believes in the share market as alternative to saving money compared to salary sacrifice alone...
It's about the share market. I say to these people these young kids ‘if you're putting my money into this market it's going to compound it at a really, really good rate. Average dividend yields around about 3.5 - 4% on good shares.
That's average rental yields in some places around Australia. Sometimes it will be higher or lower but average rental yields are somewhere around 3 per cent.
You don't need to be Einstein, just starting out with a thousand dollars, then buy another thousand, then another thousand dollars until you get about eight to 12 shares.
If you just keep building on top of those shares, you know, put two another thousand dollars into the first one you find it will compound pretty quickly over a period of time. So when these young people are getting if they're starting at 18 and by the time they get to 30 they may be looking at getting married you know because the average marriage now is around that. They're looking at buying their first property. They have a really, really good deposit for a house so they're not having to borrow to the hilt because we're seeing a lot of people now young people now moving further and further out of the city.
His advice to young investors is not to rush into moving into your first home as it can impact your deductions..
You know like it's an hour and a half commute into the city to go to work. Or two hours to get in the city by public transport because that's where they can afford to buy a property. They really want to live in the city. To me, this is where a lot of people want to own a house with their name on the title. I haven't lived in a house with my name on a title in 25 years and I'm not a constant property owner. I just don't do that because it doesn't make economic sense to me in terms of financial sense.
Some young people are better off living at home putting their money together going out and getting investment property. If they've got enough deposit and let the tenant or taxman pay for it rather than move out and buy a home because you buy a home he's got your name on a title you've just lost all your deductions.
You’re chained to your mortgage. You've got enforced slavery to a bank. Whereas to me is getting investment properties you know. One of the smart things I learned by Michael Yardy is to buy a house, build a house your in your family trust and then go and live in it and rent it off your own family trust. That's a great way to make a lot of money because it that’s all tax-deductible.
His biggest tip for investors is to buy a piece of land in your family trust, build on it, live in it, and rent it off yourself. The best part? No need for property managers to arrange it for you.
I didn't have any property managers involved. I did it on my own. The family trust is its own entity. There's a corporate trustee that holds the assets so all you need is a rental agreement between yourselves personally. You are a separate legal entity and that is a family trust. As long as you’re paying roughly around market value rent.
You’ve got to rent it to somebody. So why not rent it to yourself? We had eleven thousand dollar fridge, appliances and barbecue all that stuff got shattered. Everything we think got depreciated.
It's perfectly legal, you build or have an investment property then you rent it out fully furnished.
If you’re worried about the this type of rental arrangement, contrary to what you may have first thought, it is actually perfectly legal to do this, provided it’s done the correct way. Obviously speak to a lawyer before going ahead with it.
This has been possible for a long time. I'm not talking about superannuation. I’m talking about a family trust because you've got an investment property. What's the difference whether you rent it in the family trust or somebody else does? As long as you're paying market rates and maintaining the property. It's perfectly legal.
Let's say I’m buying commercial premises and moving my business there and renting it. it's still my own business. But I also own the property through my superannuation that's perfectly legal. Same thing. There’s still a tenant and I’m a landlord. I've had lots of property mentors, such as Jacoby back in the 1980s. He was a property courier back in the 80s and you probably never heard his name. There are lots of people that I've met along my journey that I asked to have a beer and chat with. They're all quite happy to do that. So and these people I'm mentioning They've all written books and multiple books here as well here in Australia. So that doesn't make you an expert on the book but these are all people that know what they're talking about.
They weren't pretentious. I mean, everybody has a bit of an ego but you know these are all people who are actually actively doing it and that's the difference.
Gilham recommends his book for first-time investors as well in addition to ‘The Magic of Thinking Big’ and ‘The Richest Man in Babylon’. He believes these books will train your mind and leave you with the right attitude.
Look with shares you know I mean obviously, if people are looking at investing I mean they could look at my book. I haven't written trading books in terms of how to trade the share market. I’ve read some.
Most of them are highly technical that unless you're like me you won't understand them. When I read them I think ‘why would you do that, it's making it hard work.’ The ones that I would recommend, most people wouldn't understand the content because you need to be a really high-level trader to actually read them.
It’s more about starting out. So it's more about getting your timing the market. There are too many people trying to build the penthouse before they have the foundations down in the share market.
We get a lot of people on every decade or every few years. You get a change in what’s being promoted, in the 90s was all about futures trading, then it went into options trading.
Most people didn't realize how high risk they were. Now we've got cryptos coming out and those are the biggest bubble that we've seen since the tech boom.
We're getting 21-year-olds to 25-year-olds trying to trade those and they don't even know how to tie their shoes.
I've said a couple of the younger investors, ‘Professionals aren't in the cryptocurrency mark’. They reply ‘yes, they're not are they?’
What does that actually tell you?
If I'm not in a cryptocurrency market as a professional, why would you be it? To me, it's just a really high risk. There are much safer ways of making money. So it's about understanding what you're doing first and learning. So getting that basic, first understanding of property demographics, looking at what you need to do, what are the mistakes that people make with the property.
All too often you see people buying the family home, buying the neighbour's home or they bought the home around the corner or where they grew up because they know the area. I don't care whether my house was in Perth in Dublin or in Tasmania or across the road. It's just numbers on a page to me and if the numbers add up it's that it's an investment that I'll take if the numbers don't add up. I don't care. It's just not on my radar and that's how dispassionate you need to be with property and with shares.
The books that I recommend; The Magic of Thinking Big. The Richest Man in Babylon. All these books train your brain and give you that attitude.
Attitude really is everything. I'm teaching trade as a mentoring trader. Part of being a successful shares trader is 80 per cent of how you think about it. Only 20 per cent of your technique and it's the same with property. You're always taking a risk with any investment.
If you're going to invest in a property that's $500,000 to a million dollars or whatever it is you're going to be asking. ‘Am I making the right decision?’ Training your brain in, what I would call ‘brain food’ is will get you to the results you want.
My business name is Wealth Within. The reason why it's called that is that very early on I decided that if I created more wealth on the inside then it will manifest itself on the outside.
Gilham initially started to invest in the share market, this allowed him to put more money into his property portfolio, therefore reducing the amount owing on his loans.
I got into the property market, started paying down the loans then I started buying shares.I set up a line of credit with my equity and then bought more shares with that. I started trading those shares. I was paying off my line of credit every time I sold shares. I put the money back into line of credit.
Every time I bought shares I took money out of it. My repayments kept going down. I did something that I wouldn’t recommend anybody doing. In the late 80s and early 90s, the market was pretty good.
I used my shares and we got a margin loan double leveraged which is pretty scary at that stage, it's probably a little bit naive.
I wouldn't do that now. I had double my portfolio sides of my shares. I kept trading and I was paying off the land loan and going into credit paying down my loan and I could have been hit by a bus and everything was paying for itself.
I didn't need to bring any income in to fund any of that my house. I had tenants paying for it, the taxman was paying for it. Shares were going in. It's a pretty simple way of doing it.
I was saying earlier just get a thousand dollars to buy a blue-chip, start buying top 20 shares and you really don't have to be too super focussed on exactly which one, which is contrary to what a lot of people believe is.
My first book: ‘How to beat the managed funds by 20 per cent’. I just used the top 20 shares from 1997 to 2007. The returns were roughly averaging 20 per cent per annum.
For Gilham, it’s about putting the money there and just letting it do its thing. Similar to property investing. He believes that it is important not to get scared by market movements.
I say to people well you can go to an auction on only one day and have two houses side by side and they'll go for different prices even though the same property and we saw that on ‘the block’ on Sunday.
Now for the four auctions last weekend you know one went over $400,000 dollars more than the other four houses. They're in exactly the same street. Pretty much the same, but that one house went for more. So how does that actually work?
Whereas a share it's much easier today because they're being traded every second for every business day. Between you know 10:00 and 4:00 p.m. that's what happens. You've really got to be disciplined.
This is the difference between 90 per cent of people in the share market and good share traders is that I can place a trading off down the coffee shop and forget about it. I don't have an app on my phone that gives me like pricing. I don't ever have like pricing on my mobile phone. I don't have like price on my computer at all.
When you've got like pricing on the computer and you are looking at it you're getting sucked into a black hole to hell on investing because you're starting to then buy into the emotions of the market.
I don't need that as an investor you need to be clinical whether it's property or shares you need to be black and white in the property. I know there are certain unbreakable property rules, 100 per cent unbreakable rules. I know there are some variables around those as well. I would go to buy a property is a set of criteria. I need the property to be scrutinized.
For example, I’m going to buy when it does X.. I'm going to sell if it does X. That's it. You just shut it down and go for a walk. Go to the beach. That's how simple it should be and it can be that simple and it's not hard to learn to do that. Whereas there's a lot of risk in the share market and we get bombarded every day in the media.
Gilham’s personal habits include, thoroughly researching your topics, talking to the right people and having courage when asking for advice.
Most people are lazy. They're lazy not because they don't know what to do and then they’re just thinking ‘oh it's all too hard for me’ or ‘I'm a failure’. I call myself an explorer. If I see something, I think ‘I want to explore that.’ Once I am fully informed then I'll make that decision.
We get inquiries every day from people wanting to look at our course. I know out of every 100 people we can only speak to 30 of those. The rest of them won't ever talk to us. They will just go to our website, never respond to an e-mail or respond to a phone call. Of the 30 that we'll actually speak to, half of those won’t ever speak to us again and only give us a real quick courtesy response. Now to me that's just stupidity. People need to talk to properly understand what the opportunity is, then decide. People are too scared of being sold something.
He believes it’s very important to educate yourself no matter how much you think you know...
They don't investigate. I'm going to be at the Trader's Expo in Vegas on Thursday. American Comics is out Friday, when I go to expos doesn't matter whether it's a home show or investment expo. I walk into all the booths, talk to people and find out what they're doing, how they're doing it and get information because it's about understanding things first and then making a logical, rational decision. A lot of people are too scared of being sold. That's what I mean by a poor mentality.
There's an old saying ‘you get what you focus on the most.’ So you're focussing on not having money. Then that's what you’ll have. People always are giving excuses ‘I don't have the time’ and ‘I don't have the money’ both of those are lies. In most cases, if it was important enough you'd find the time, the money and it to me any excuse is a lie.
It's not that they don't at the time, in 99 per cent of the cases, they're not making it important enough to allocate the time. So that's where I look at it and go well. ‘What is important then I mean you had I think it. Stephen Covey talks about the four quadrants.
Yes an important agency down or what is it for the four quadrants of life or for fortunes of investing.
The four quadrants of life you know is it important? is it urgent? is or is it just urgent noise and it's not important?
So looking at what's important to you, writing down what's important to you. Focus your attention on that. All too often, we focus on what we don't want rather than what we do want. Often people, when we're talking about shares people, keep focussing on not having money and they say ‘I can't afford it’ when you keep telling yourself you can't afford it that means you're not going to be able to afford it. Whereas changing the way you talk about it, it's not about you can't afford, it it's just right now you don't have the capital to do that. The question should be ‘how you should be able to afford that?’
Then you set a plan and get to it to get that. Most people defeat themselves before they even get started. It doesn't matter whether it's property or shares or any other types of investments.
Gilham’s advice to his younger self involves being especially cautious when it comes to consultants.
I would say ‘don't trust consultants’.
I find consultants are the most annoying people on the planet. They tell you that they know everything, but all they're doing is they give you a lot of theory. They really don't help much if you don’t understand it yourself. Do your own research and understand it yourself. Don't trust other people.
If I'm going to make money or lose money, I want to be at fault for that. I don't want to blame other people, that's why I say things like ‘cryptocurrencies is going to be blood on the street sometime down the track.’ I know with 100 per cent certainty there is going to be people that will be wiped out with it. Absolutely. Certainly but what I also know is they're going to start pointing the finger at the government saying why didn't you do X. Why didn't you tell me. Yet we're telling people and it's about being open and listening to people. That was one of the things one of my mentors said to me as I briefly mentioned earlier is when you're in an expert’s company ‘shut up and listen you can't learn while you're talking.’ Listen to experts and if an expert is telling you you stay at this property market because of X, listen to them don't complain when you've stuffed it up. You should have listened. To me, it's about being humble, you know it really is about being humble saying ‘ I'm a servant of the market. I don't master it.’
I'm an expert in the share market. I know what I'm doing but I still am a student in the market.
To me, it's being open to learning because if you're not teachable nobody can help you.
If you wish to connect with him, learn more about his strategy or find out about his mortgage services, you can reach out to him via his website
Our Website wealthwithin.com.au. I've got a podcast guy called ‘talking wealth’ which we discuss everything from loans and properties. If you google ‘talking wealth’ there's a whole heap of Podcast like 800, 900 podcasts so they can listen to those as well- www.wealthwithin.com.au.